Engineering Services NAICS 541330

Mar 23, 2026 - Insurance Coverage Requirements Outpace Engineering Fee Growth

• Engineering News-Record reports that the professional liability insurance market for design firms remained relatively stable in 2025, with most rate increases at or below 5%, but rising claims and coverage demands are increasing pressure on the engineering industry, according to an Ames & Gough survey. Even without major rate hikes, firms are being required to carry higher coverage limits, often exceeding $5 million, to meet client expectations and manage growing legal risks. Claim severity is rising, with 60% of insurers reporting higher losses and many paying multimillion-dollar claims, particularly in structural and civil engineering. Higher legal costs, complex projects, and aggressive litigation are driving these trends. Engineers say insurance costs and required coverage levels are increasing faster than fees, creating a widening gap between compensation and risk that could impact project participation and profitability.
• Construction industry leaders are urging swift action on the next federal highway bill as the current authorization under the $1.2 trillion Infrastructure Investment and Jobs Act expires September 30, according to Construction Dive. Congressional committees are drafting a bipartisan reauthorization, expected to span five years and potentially total about $550 billion, with a focus on roads, bridges, transit, and rail, along with permitting reforms and a proposed electric vehicle fee to support the Highway Trust Fund. Industry groups warn that failure to pass a bill on time would create uncertainty for infrastructure projects and equipment investment. Key challenges include limited legislative time, a projected $280 billion Highway Trust Fund shortfall by 2034, and the need for bipartisan support in a divided Congress. Construction leaders say a long-term, fully funded bill would provide stability and sustain demand across the sector.

• US rail transit expansion has failed to keep pace with urban population growth, leaving the nation with more than 7% fewer metro rail miles per capita than in 1990, according to an Urban Institute report and Smart Cities Dive reporting. Despite $108 billion in federal funding from the Infrastructure Investment and Jobs Act, non-highway transit spending has remained flat since 2021, and no new federal transit agreements have been signed since 2025. Rising construction costs and a shift away from heavy rail toward lower-cost options such as bus rapid transit have further limited system expansion. For the engineering and infrastructure sectors, the slowdown signals fewer large-scale transit projects and reduced long-term planning opportunities. Analysts warn that continued delays and underinvestment could lead to fewer projects delivered on time and increased reliance on car-based transportation systems.
• North American construction and engineering spending on nonbuilding structures in 2026 is expected to grow by 4% after increasing an estimated 2% in 2025, according to FMI’s first-quarter 2026 North American Engineering and Construction Outlook. Sewage and waste disposal is expected to lead 2026 spending growth with a rise of 8% amid a recent EPA funding boost of $7 billion for water and wastewater projects. The data center boom is prompting utilities to invest in water reuse and reclamation projects, which will also help drive a 6% increase in water supply spending in 2026. Spending on conservation and development projects is expected to grow by 7% in 2026, with dredging making up a significant share of activity. Power project spending is forecast to rise by 5% in 2026 as data centers drive hardening and build-out of grid infrastructure. Highway and street spending is expected to grow by 1% in 2026 as funding through the Biden-era Infrastructure Investment and Jobs Act matures.